Prosperity Minerals Holdings Ltd Additional UGL loan (1696H)

TIDMPMHL

RNS Number : 1696H

Prosperity Minerals Holdings Ltd

17 June 2013

Prosperity Minerals Holdings Limited

("Prosperity" or "the Company")

Additional loan of US$12 million to Brazilian iron ore partner

Prosperity Minerals Holdings Limited (PMHL.L), an iron ore trading and investment business and real estate owner/developer based primarily in the People's Republic of China (PRC), today announces an additional US$12 million loan ("New Loan") to its joint venture in Brazilian iron ore exploration and production.

Prosperity holds an effective 35 per cent interest in United Goalink Limited ("UGL") which is a joint venture company engaged in the exploration and production of iron ore in Brazil. UGL holds approximately 600 square kilometres of exploration rights and 3 square kilometres of mining concessions in the State of Ceará, in north east Brazil. Further information is set out in announcements dated 9 December 2010, 29 December 2010 and 6 June 2012.

The New Loan, which carries an interest rate of 12 per cent per annum, is in addition to the US$37.8 million loaned by Prosperity to UGL, since late 2010, which has been used to fund development and build a new processing plant. Construction of the facility was completed in May of this year and trial production has commenced. The New Loan will enable the site and its handling facilities to achieve their full potential. To date, only shipments of unprocessed iron ore have been made.

Processing improves the quality of the iron ore (which is expected to have an iron content in excess of 63 per cent) while, at the same time, lowering costs. In the third quarter of 2013, UGL expects to ship some 150,000 tonnes of processed product on its way to an annual tonnage target of 900,000 tonnes.

All loans and interest will be repaid from production proceeds on a tonne by tonne basis, with full payment expected within three years of target production being achieved.

The Directors believe that the New Loan and the investment in UGL are in the interests of the Company and its shareholders.

Further enquiries:

 
 Prosperity Minerals Holdings Limited 
  Patrick Li 
  Neelke Kruger-Logan                    +852 3187 2618 
 Citigate Dewe Rogerson 
  Martin Jackson                         +44 (0) 20 7638 
  Priscilla Garcia                        9571 
 Daniel Stewart & Company plc 
  Corporate Finance: Paul Shackleton, 
  Antony Legge, Emma Earl                +44 (0) 20 7776 
  Corporate Broking: Martin Lampshire     6550

Notes to Editors:

Prosperity (AIM: PMHL) is:

- an iron ore operator and investor serving the PRC;

- a specialised real estate owner and developer in the same market; and

- an investor in two cement plants, also in the PRC.

Prosperity's iron ore trading business has been operating since 1992 and sources iron ore, for shipment and use in the PRC, from major international iron ore producers in South Africa, Brazil, Australia and South East Asia, Thailand and Malaysia in particular. The majority of the Company's iron ore is sold to large steel manufacturers in the PRC. In the fiscal years ended 31 March 2011 and 2012, Prosperity shipped 6.3 million tonnes and 4.8 million tonnes of iron ore respectively.

In December 2010, Prosperity acquired a 35% effective interest in United Goalink Limited (UGL), a Brazilian mining operation which owns approximately 600 square kilometres of exploration rights and 3 square kilometres of mining concession in the State of Ceará .

Prosperity has operated a real estate investment and development division since February 2010 which is focused on creating an attractive portfolio of PRC property and development assets. The Company has also entered into a number of agreements with partners to develop residential, commercial and recreational projects principally in Guangzhou City and Changzhou City in the southern PRC. Prosperity also owns an interest in an existing commercial building in Guangzhou, which is a regional capital and is located in the Pearl River Delta, the foremost economic zone in the southern PRC.

Prosperity has two investment associates in the cement manufacturing industry in the PRC. The Company holds a 33.06% interest in Anhui Chaodong Cement Company Limited (ACC), located in Anhui Province in the eastern PRC. The designed sellable production capacity of ACC is 5.1 million tonnes of cement and clinker per annum. In addition, Prosperity owns 16.11% of TCC Liaoning Cement Company Limited which has a designed saleable production capacity of 2 million tonnes of cement and clinker per annum. As announced on 6 February 2013, this latter shareholding is the subject of a conditional sale and purchase agreement.

The PRC is the World's second largest economy (behind the US) and the biggest buyer of iron ore; it is also the largest producer and consumer of cement.

This information is provided by RNS

The company news service from the London Stock Exchange

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